Oatly: a carton that argued with the dairy aisle, and a café that proved it

Oatly began in Sweden in the 1990s, built on oat research from Lund University, and for most of its first two decades it was a sensible health product sold to people who could not drink milk. In 2012 a new chief executive, Toni Petersson, arrived and brought in John Schoolcraft as creative director. Together they changed how the company talked. The cartons filled with long, chatty, self-aware copy that addressed the reader directly and joked about itself, and the brand picked a side with lines such as “Wow No Cow” and “It’s like milk but made for humans”. The Swedish dairy industry took Oatly to court over its marketing in 2014, and a court ruled against several of its slogans the following year.

The US launch came in the autumn of 2016, and it started away from the supermarket. Oatly sold its Barista Edition to specialty coffee shops first, starting with Intelligentsia, and sent its people to café after café with samples. In New York it went from about a dozen cafés in early 2017 to more than two hundred by late 2018, and demand outran supply. In May 2021 Oatly listed on Nasdaq at 17 dollars a share, valuing the company at about 10 billion. What followed was harder: losses, production problems, a short seller’s report, a share price that fell by more than 90% from its peak, a new chief executive in 2023 and, in early 2024, the sale of much of its US production capacity to a contract manufacturer. That story is still moving.

A category drawn against an enemy

Category design starts with a frame, a point of view that makes your offer the obvious answer. Most plant drinks framed themselves as alternatives, a polite option for people who could not have the real thing. Oatly framed itself against the category, and treated the values of dairy as the territory of an opponent. In the method’s terms this is an antithesis used as positioning: a value the rest of the market treats as central, rejected on purpose and in public.

The antithesis did several jobs with one move. It gave the brand a voice with something to push against, the energy the books call codified anger. It filtered the audience at the door, since anyone who found the tone irritating left before a single euro of marketing was spent. And it gave the new category a story, so a carton of oat drink could stand for a set of choices about food, climate and taste. The dairy lawsuit fit the frame, since a fight with the incumbent proves which side you are on.

The barista as a channel

The coffee shop is where the case gets precise. Reading a channel as a triplet (the subject it reaches, the value it carries, the proof it gives) shows why the café worked so well. The subject was the barista, a professional whose taste customers trust. The value was a plant drink that behaves like milk in coffee, foaming and blending without splitting. The proof was the latte itself, tasted by a customer who had not asked for it.

A single cup did three jobs. It recruited new drinkers, it proved the product’s main claim in the hardest test available, and it gave a small community of cafés a reason to feel early. When customers then asked where to buy the carton, the supermarket became a follow-up to a decision already made in the café. Every barista who switched became a reference.

When the frame meets the spreadsheet

A category drawn against an enemy has a ceiling and a cost. Once oat drinks became normal, the antithesis had less to fight, and the shelf Oatly had taught people to look for filled with competitors and store brands at lower prices. The pioneer paid for the education of the market, and others collected part of it.

The listing also changed who the brand had to convince. A voice built on anger at an industry now had to speak to investors about margins and factories, and the decision in 2020 to take money from a group led by Blackstone had already drawn criticism from customers who read it against the brand’s stated values. In our reading, the brand’s proof had always lived in cafés and in a tone of voice, and the business problems that followed were operational: building capacity, controlling costs, and supplying a category at scale.

If you are drawing a category, decide early which channel will carry the proof, and plan the second chapter, when the category you named belongs to everyone. Building that plan before the money arrives is part of what we do.